January 27, 2012

“UMA ON THE HILL”

This just may go down as the busiest “first week” of a legislative session in history, certainly the busiest in my nearly forty years on the hill.

The neck break pace set on Monday continued all week as legislators met each morning in appropriations committees, floor time for part of each morning and standing committees all afternoon. UMA has had a host of bills in committees in each house this first week and some actually passed in the Senate.

COMMITTEE AND FLOOR ACTION:

HB-28 Economic Development Task Force (Wilson) –This measure creates a task force of legislators to study impediments to economic development in Utah. Passed out of committee to the floor of the House and passed the house vote, sent to the Senate for their action. UMA does not oppose but questions whether it is redundant in light of all the other ED activities.

HB-35 Extension of Recycling Market Development Zone Tax Credits (Harper) – Renews a long-standing income tax credit for metal recyclers and manufacturers using recycled metals. Passed out of House Revenue and Taxation Standing committee in the House, considered on the floor of the House where it passed and was referred to the Senate. Senate has assigned it to their Rev. and Tax Committee. UMA strongly supports this measure to renew a income tax credit for manufactures dealing with metal recycling.

HB-41 Property Taxation of Business Personal Property (Painter) – A measure aimed at exempting property taxes on personal property for small businesses. It was considered in committee this week but was held pending amendments to narrow its target. UMA urged the sponsor to change the approach of the bill to focus on small businesses and not providing a minimal exemption for all businesses that has escalated the fiscal note to $4million. When the sponsor has amendments prepared it will be heard again. UMA supports a narrowly drawn exemption for those with less than $25,000 in personal property.

HB-70 Air Quality Task Force (Arent) – Creates an air quality task force of legislators to study air quality in Utah and make recommendations for improvement. Passed out of committee and was placed on the 3rd reading calendar in the House. It is expected to pass. UMA does not oppose, but again wonders if it is redundant considering the work being done with an initiative from the Governor’s office and DEQ.

HB-210 Severance Tax Amendments (Nielson) – Requires the Legislature to place all severance tax in the Constitutionally-creates Severance Tax Trust Fund to avoid siphoning off monies before it gets to the trust fund. Surrounding states have billions of dollars in similar funds for the benefit of education. Passed out of committee and referred to the 3rd reading calendar in the House. UMA supports building the permanent trust fund for future uses.

HB-263 Unemployment Benefits for Military Spouse (Hemingway) – Removes a prohibition against unemployment benefits for an employee who voluntarily quits a job to follow a spouse who is in the military and is transferred. The Employment Advisory Council, of which UMA is a member, approved this measure as an exception because a member of the military has no choice as to whether to accept a transfer. It was the considered opinion of the council that “this is the least we can do for those who risk their life to protect our freedoms”. Any expenditure in this instance will not count against the employer. Passed committee and was referred to third reading in the House. UMA testified in favor of this measure in committee.

HJR -6 Joint Resolution on Severance Tax (Nielson) – A companion to HB-210 proposing to amend the Utah Constitution to require all severance tax except for that claimed by Native American Tribes to be placed in the Permanent State Trust Fund. Passed the House Committee and placed on third reading the House. UMA supports efforts to increase the permanent trust fund.

SB-11 Department of Environmental Quality Boards Adjudicative Proceedings (Dayton) – Amends the adjudication function within DEQ in addressing appeals to permits or other agency action to provide that the ALJ conduct a “record review” limiting the review to that which was part of the record when the agency issued the permit. This is a priority bill for UMA and has been in the works for more than two years. Passed the Senate and has been sent to the House where it is assigned to a standing committee to be heard on Monday, January 30.

SB-24 Research Tax Credit Amendments (Valentine) – Extends a nonrefundable research income tax credit for business. Bill passed out of committee early in the week and passed the Senate unanimously on Wednesday. It was assigned to the House Rev. and Tax Committee on Thursday. UMA strongly supports the extension of this income tax credit.

SB-39 Gubernatorial Authority over Higher Education Officials (Reid) – Gives the Governor authority to approve the hiring of the Commissioner of Higher Education and the President of the Utah College of Applied Technology after consultation with the Board of Regents and the UCAT board respectively. This bill passed committee and was voted out of the Senate almost unanimously to the House for their action. UMA is monitoring this bill.

SB-129 Unemployment Insurance Modifications (Bramble) – A measure that reduces the maximum unemployment insurance contribution rate for an employer from 9% plus the social contribution rate to 7% plus the social contribution rate beginning in calendar year 2012 and caps the social unemployment insurance contribution rate for all employers at .4% for calendar year 2012 only. This is another bill approved by the Employment Advisory Council to facilitate economic development from employers hardest hit with the recession. It slows the recovery of the UI Trust fund slightly but does not jeopardize the solvency of the fund. Passed the Senate Committee unanimously and placed on the second reading calendar in the Senate. UMA supports this bill.

ON OTHER FRONTS:
BUSINESS RECOVERING IN OGDEN AND WEBER COUNTIES
Utah Business Daily
The economy is looking up in northern Utah, according to business and community leaders at Utah Business magazine’s Weber/Davis roundtable Wednesday morning. Industrial real estate is in high demand, said Tom Freeman, senior director of industrial real estate at Commerce Real Estate Solutions. “Our marketplace is very healthy, especially in the industrial sector,” he said. View Full Article

MORE SEEK UNEMPLOYMENT AID ON HOLIDAY VOLATILITY
Today in Manufacturing
Unemployment applications have been particularly volatile this month because employers have cut temporary workers hired for the holidays ... continue

DURABLE GOODS ORDERS RISE IN DECEMBER
Today in Manufacturing
Orders to U.S. factories for long-lasting manufactured goods increased after business stepped up spending on machinery and other capital goods ... continue

OBAMA: AMERICA ABOUT HARD WORK, NOT HANDOUTS
Today in Manufacturing
The President visited two manufacturing plants as he touted a series of plans he hopes will ensure that the economic recovery "starts with manufacturing" ... continue

OBAMA: MANUFACTURING IS THE FOUNDATION OF AN ECONOMY THAT IS 'BUILT TO LAST'
Quick Manufacturing News
'Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.' Click to continue

VIEWPOINT: TIME FOR WASHINGTON TO DO MORE THAN TALK ABOUT INFRASTRUCTURE AND JOB CREATION
Quick Manufacturing News
Association of Equipment Manufacturers says, 'Americans deserve more than just talk, they want jobs and a crucial investment in our global competitiveness.' Click to continue

BUSINESSES PREDICT GDP GROWTH, PRICE STABILITY
Quick Manufacturing News
Real Gross Domestic Product will grow at a rate exceeding 2% between the fourth quarter of 2011 and the fourth quarter of 2012, according to two-thirds of respondents to the January industry survey conducted by the National Association for Business Economics. Click to continue

INCENTIVIZING AND REVITALIZING U.S. MANUFACTURING
Quick Manufacturing News
The Manufacturing Reinvestment Account Act would allow companies to establish a manufacturing reinvestment account of up to $500,000 that is taxed at a low 15% rate and must be used to purchase equipment and facilities or for job training. Click to continue

VIEWPOINT: TO TACKLE THE WORLD'S ENERGY PROBLEMS, WE NEED TO MAKE ALL ENGINE TECHNOLOGIES MORE EFFICIENT
Quick Manufacturing News
Electrification is only part of the solution to reduce petroleum consumption and greenhouse gas emissions. Click to continue

MIDSIZE FIRMS CHOOSE TECHNOLOGY OVER HIRING
Quick Manufacturing News
Executives attribute productivity increases to business process improvements and tech investments. Click to continue

OBAMA TO PROTECT US GOODS IN GLOBAL SUPPLY CHAIN
Today in Manufacturing
The 'National Strategy for Global Supply Chain Security' says threats to necessary goods from beyond U.S. borders are now a matter of national security ... continue

ENERGY INDUSTRY HAS MIXED REACTION TO OBAMA SPEECH
Quick Manufacturing News
Oil and gas groups say Obama's 'stated goal conflicts with record;' alternative energy producers applaud focus on renewables. Click to continue

OUTSOURCING EDUCATION FOR THE WELL-TRAINED EMPLOYEE
Today in Manufacturing
As American manufacturers look to regain momentum in today's economy, a main concern will be talent. A business that isn't learning today is falling behind tomorrow ... continue

DOW APPROACHES HIGHEST LEVEL SINCE 2008 CRISIS
Today in Manufacturing
A series of strong earnings reports from the likes of Apple and Caterpillar, plus good manufacturing data, pushed the Dow close to 13,000 ... continue

MANUFACTURERS DEMAND ACTION FOLLOWING STATE OF THE UNION
NAM
President Obama gave his annual State of the Union address on Tuesday, January 24. While the speech focused largely on manufacturing in America, the President missed a prime opportunity to establish a comprehensive agenda to strengthen this critical sector of the economy.

Manufacturers were pleased to hear the President's emphasis on revitalizing U.S. manufacturing, bolstering domestic energy production and increasing workforce training but were disappointed that instead of bold action, the President proposed tinkering around the edges.

Manufacturing is poised for a renaissance, but absent concrete strategies to lower the cost of doing business in the United States and increase our competitiveness, we will fall short of the goal. It is currently 20 percent more expensive to do business here in the United States, excluding labor costs. Manufacturers need pro-growth tax rates, sensible legal policy, reasonable regulations and affordable and secure energy supplies.

"This cost gap is a barrier that must be eliminated," said NAM President and CEO Jay Timmons. "The existence of this gap is not the work of our competitors but rather is self-inflicted by Washington. We have the opportunity to fix it and to reaffirm the global leadership of manufacturing in the U.S."

On energy, the President called for an "all of the above" approach, yet failed to mention his rejection last week of the shovel-ready Keystone XL pipeline. Construction of the pipeline would create 20,000 jobs immediately—and 7,000 of them would be specific to manufacturing. Manufacturers need affordable, reliable and secure energy, and the Keystone XL pipeline is the perfect vehicle for that.

The President also touted his Administration's efforts to rein in regulatory costs, but he did not address the rampant overregulation and overreach by the National Labor Relations Board and the Environmental Protection Agency. Manufacturers also need action on comprehensive tax reform that will lower the corporate tax rate so that we can compete for investment across the globe. And an aggressive trade policy that opens new markets is essential so America does not stand idle while other nations move into those markets.

Together, we can boost manufacturing in the United States, but only if the President and Congress are serious about these reforms. "It is time for action rather than rhetoric so that we may achieve these goals to lower the cost of doing business in the U.S. and make us more competitive," said Timmons. The NAM's roadmap, A Manufacturing Renaissance: Four Goals for Economic Growth, will take us to that ultimate goal—where America will be the best nation to manufacture, innovate and serve as the hub of the global marketplace.

UTAH LIEUTENANT GOVERNOR BLOG
100,000 Jobs
Wednesday night, Governor Herbert delivered his State of the State address to the Legislature and residents of Utah. The Governor reported that the state of our state is strong, and growing stronger. I agree. As Lt. Governor I am able to visit businesses and entrepreneurs throughout Utah. There is strong evidence of a renewed economy and promising growth. I’ve seen home-grown businesses expanding, new start-ups forming, and large international companies bringing operations to Utah. This growth is happening both on and off the Wasatch Front. Utah’s unemployment rate now stands at a remarkable 6%, down from 7.4% only three months ago and 8.5% at the beginning of 2011. Utah is fully 2.5% below the national rate.

The Governor outlined his goal of accelerating private sector job creation of 100,000 jobs in 1,000 days. This is a laudable goal, and one I believe we can achieve, but as Gov. Herbert emphasized, government won’t create these jobs, the private sector will. We will do our part by keeping Utah’s government small, efficient, and business-friendly. For example, the Governor asked the Legislature to substantially reduce the unemployment insurance rate (which is much like a tax). This will save Utah businesses millions of dollars and allow them to reinvest in more equipment and more jobs.

The Governor is also leading the effort to put Utah at the forefront of energy and natural resource development. We are working in cooperation with the Legislature and our congressional delegation to fight for continued access to our public lands. We are also collaborating with other Western states to present a strong and unified voice to federal regulatory agencies. At least 23,000 Utahns are employed in the energy sector, earning on average 171 percent of the state’s average wage. Helping this industry to flourish will create thousands of jobs and keep the cost of energy low for all of us.

Last year the Governor directed all state departments, in consultation with over 100 business associations, to review all their regulations to determine which should be kept, which should be modified, and which should be eliminated. Consequently, 368 regulations were rescinded, simplified, or are in process of being eliminated. Because regulation is next to taxation in burdening the private sector, removing unnecessary regulations makes it easier for businesses to succeed.

We believe that education is essential for real economic development. That’s why we continue to work with public and higher education leaders to ensure that our students are prepared for postsecondary education and the workforce. This means developing a rigorous curriculum and fully funding our growing student population. We are also forming partnerships between industry, education, and government to identify and align college courses with marketplace needs. Some education programs promise employment opportunities, but don’t always pan out. Our goal is to have our education systems offer learning and training which, in reality, make students more employable.

The Herbert/Bell administration is devoted to strengthening our economy and fostering the creation and retention of good businesses and jobs for all Utah citizens. For more information on the Governor’s goal of 100,000 jobs in 1,000 days visit: utahjobsplan.com

ENERGY INDUSTRY WANTS TO DITCH 'FRACKING'
Today in Manufacturing
The word, once industry jargon for hydraulic fracturing, has taken on new meaning over the years, and the industry wants to dump it ... continue

ECONOMY GREW MODEST 2.8 PCT. IN Q4, BEST IN 2011
Today in Manufacturing
Americans spent more on cars and trucks, and companies built up their stockpiles, but defense cutbacks hit certain industries hard ... continue

OBAMA PLANS LEASE SALE FOR GULF OIL, GAS DEVELOPMENT
Quick Manufacturing News
Oil industry group says the move doesn't go far enough. Click to continue

OBAMA ADMINISTRATION LAUNCHES SUPPLY CHAIN SECURITY PROGRAM
Quick Manufacturing News
'We will integrate and energize our efforts to enhance our ability to manage risk by building a layered defense, addressing threats early, and fostering a resilient system that can absorb and recover rapidly from unanticipated disruptions,' according to President Obama. Click to continue

PRIVATE SECTOR UNIONS SAW GROWTH IN 2011
Today in Manufacturing
The number of unionized workers at private companies increased by 110,000 in 2011, but organized labor saw major declines in the public sector ... continue